LONDON: Raw sugar futures on ICE edged higher on Tuesday, underpinned by tightening supplies in the European Union and falling production in Centre-South Brazil.
SUGAR
July raw sugar was up 0.05 cent, or 0.4pc , to 11.71 cents per lb at 1121 GMT.
Dealers said the market was underpinned by continued strong demand for hydrous ethanol in Brazil, which had encouraged the use of a high percentage of cane to produce the biofuel rather than sugar.
Other supportive factors include signs that consumption in the European Union may have been stronger than expected, helping tighten supplies in the trading bloc.
EU sugar exports so far in the 2018/19 season total about 1.18 million tonnes, down about 50 percent from the same period in the prior season, according to Commission data.
"Latest trade statistics continue to show that the EU sugar market is tightening," ING said in a market note.
Fund short covering could give added impetus to the rebound from a 7-1/2 month low of 11.36 cents set on May 21.
"The funds net short has now broken its record from last year and the fundamentals are shifting incrementally in a bullish direction," broker Marex Spectron said in a report.
Speculators sharply increased their net short position in raw sugar on ICE Futures US in the week to May 21, US government data showed on Friday.
August white sugar was up $2.50, or 0.8pc , at $326.90 a tonne.
COFFEE
July arabica coffee was 0.2 cent, or 0.2pc , lower at 93.10 cents per lb.
Dealers said the market continued to keep a close watch on weather in top grower Brazil, with a drop in temperatures helping to spark some short covering last week but no damage to crops yet reported.
July robusta coffee fell $11, or 0.8pc , to $1,357 a tonne.
Kenyan coffee production in 2019-20 is seen dropping to 650,000 bags, the US Department of Agriculture (USDA) attache in Nairobi said, representing the country's lowest production in over 50 years, according to historical USDA data.
COCOA
July London cocoa rose 3 pounds, or 0.2pc , to 1,792 pounds a tonne, underpinned by the weakness of sterling.
July New York cocoa was down $25, or 1.0 percent, at $2,442 a tonne.
Below-average rainfall last week in most of Ivory Coast's cocoa-growing regions could cause the April to September mid-crop to decline in some regions, farmers said.
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